Wealth Creator : Focus on Silver

When we talk about safe investment every investor want to invest in gold, people think only gold is the
safe opportunity to invest. Due to it’s social value we Indians always like to invest in precious metals like
Gold & Silver. Here we are trying to divert investor’s concentration towards another shining metal. Why
people invest in gold, because gold is scare ornament in the world. Only gold we have considered for
investment purpose. But as per our consideration, we are going describe how silver is also emerged as
ideal for investment. Quite simply Silver is in a bull market, also trying to outperform gold (annualized
return wise) and has not seen any overly enthusiastic investment yet.

Why one should consider Silver as an Ideal Investment…

The historic price ratio of silver to gold shows that about 10 ounces of silver would buy one ounce of gold,
a 10:1 ratio. Recently, the ratio is about a 70:1 ratio (with silver at $13/oz., and gold at $930/oz.) As the
silver to gold ratio returns to historic values, from 70:1 to 10:1, you may make over 7 times more money
investing in silver, than gold!

Silver’s reputation as a volatile metal has been amply reinforced in 2008 as the metal has up until mid-
October traded in a $12.25/oz range, which compares to a $4.15/oz range in 2007 and a $6.11/oz range
in 2006. Indeed, Silver outpaced Gold on the way up with a 57% rise between the December 2007 low
and the March 2008 high, while Gold rallied 33% in the same period. Gold has since dropped 31%, while
Silver has fallen 57%.

ANNUALISED GAIN OF $ OVER GOLD *

GAIN / BANK INTEREST INTEREST MATURITY

GOLD RATE LOSS GAIN / DEPOSIT - US$ 1 AMT. VALUE
YEAR US$/OUNCE US$ LOSS % $ 1 Yr. Yr. % US$ US$
1990 383.44 - - 383.44 10 39 422
1991 362.11 (-)21.33 -5.56 422 9.25 39 461
1992 343.82 (-)18.29 -5.05 461 7.5 35 496
1993 359.77 15.95 4.64 496 6.75 33 529
1994 384 24.23 6.73 529 5.5 29 558
1995 384.17 0.17 0.04 558 6.5 36 594
1996 387.77 3.6 0.94 594 7 42 636
1997 330.98 (-)56.79 -14.65 636 5.75 37 673
1998 294.24 (-)36.74 -11.1 673 5.5 37 710
1999 278.88 (-)15.36 -5.22 710 6.5 46 756
2000 273.3 (-)5.58 -2 756 6.75 51 807
2001 271.1 (-) 2.20 -0.8 807 5.5 44.38 851.38
2002 342.75 (+)71.65 (+)26.43% 851.38 2.55 21.71 873.09
2003 417.25 (+)74.5 (+)21.74% 873.09 2.5 21.83 894.92
2004 435.15 (+)17.9 (+)4.29% 894.92 2.8 25.06 919.97
2005 533 (+)97.85 (+)22.49% 919.97 3 27.6 947.57
2006 635.7 (+)102.7 (+)19.27%
12.03.2007 652.5 (+)16.8 (+)2.64%
GAIN / LOSS FROM 1990 (-) (+) (+)
TO 2000 (-) 81.42 21.23% 536.53 147.12%
(+)
(-) 1.87% 12.98%
ANNUALIZED GAIN/ LOSS p.a. p.a.
GAIN $ DEPOSIT OVER GOLD – NET (+) 557.76
GAIN $ DEPOSIT OVER GOLD 168.35%
ANNUALIZED GAIN $ OVER GOLD 14.85%

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 Wealth Creator : Focus on Silver
ANNUALISED GAIN OF $ OVER SILVER*
SILVER BANK INTEREST MATURITY
RATE GAIN / LOSS GAIN / DEPOSITS - US$ 1 INTEREST VALUE
YEAR US$/OUNCE US$ LOSS % $ 1 Yr. YR. AMT. US$ US$
1990 4.608 - - 4.608 10 0.4608 5.0688

1991 3.909 -0.699 -15.17 5.0688 9.25 0.4688 5.5377

1992 3.71 -0.199 -5.091 5.5377 7.5 0.4153 5.953

1993 4.968 1.258 33.91 5.953 6.75 0.4018 6.3548
1994 4.769 -0.199 -4.01 6.3548 5.5 0.3495 6.7043
1995 5.148 0.379 7.95 6.7043 6.5 0.4358 7.1401
1996 4.73 -0.418 -8.12 7.1401 7 0.4998 7.6399

1997 5.945 1.215 25.69 7.6399 5.75 0.4393 8.0792

1998 5.549 -0.396 -6.66 8.0792 5.5 0.4443 8.5236
1999 5.218 -0.331 -5.97 8.5236 6.5 0.554 9.0776
2000 4.73 -0.488 -9.35 9.0776 6.75 0.6127 9.6903
2001 4.354 -0.376 -7.95 9.6903 5.5 0.533 10.2233

2002 4.665 (+) 0.311 (+) 7.14 10.2233 2.55 0.2607 10.484
(+)
2003 5.965 (+) 1.30 27.87 10.484 2.5 0.2621 10.7461
(+)
2004 6.77 (+) 0.805 13.30 10.7461 2.8 0.3009 11.047
(+)
2005 8.83 (+) 2.06 30.43 11.047 3 0.3314 11.3784

2006 12.9 (+)4.07 (+)46.09

12.03.2007 12.97 (+)0.07 (+)0.54

GAIN / LOSS FROM 1990 TO (-) (+)

2000 (-) 0.038 0.82% (+) 6.439 146.93%
(-) 12.97%
ANNUALIZED GAIN/ LOSS 0.07% p.a.

GAIN $ DEPOSIT OVER SILVER - NET (+) 6.477

GAIN OF $ DEPOSIT OVER SILVER 147.75%

ANNUALISED GAIN OF $ OVER SILVER 13.04%

As per data shown annualized gain of $ over gold is 14.85% & annualized gain of $ over silver is
13.04%.but as compare gold with silver. We can see good opportunity in silver for investment. Even lower
budget investor can invest in silver & entitled them self for higher returns. Each year, silver mines produce
about 650 million ounces of silver. 200 million ounces come from recycling and about 100 million ounces
come from investor or government sales. That's a total of about 1000 million ounces. Of that total:

• about 42% is consumed by industrial use

• about 28% consumed by jewelry
• about 20% consumed by photography
• about 5% consumed in coins and medallions

New uses for Silver are being invented and applied every day. The superior properties of Silver have been
apparent in many applications for many years while
New technologies silver superior qualities some industrial uses today include.

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 Wealth Creator : Focus on Silver
Why Silver will shine:

As per consideration, now a day’s silver is not precious metal only, Silver can tarnish. But the tarnish on
silver does not mean it is a wasting asset, the tarnish is very minor. Silver coins still exist from Roman
times, 2000 years ago! In fact, if silver did not tarnish, it likely could not be used to make photographs!
Silver's chemical reactivity helps to make it more useful. So, that silver does tarnish, a little, is actually a
benefit for silver, because it creates additional industrial demand. Here we are putting some facts about
silver…

Industrial Demand

Industrial requirements account for 43% of total Silver demand and are of paramount importance to the
Silver market. In recent years, global growth has been expanding at a fast pace, but this has started to
slow in 2008 and is likely to slow further in 2009. Consensus forecasts for World economic growth are
3.5% in 2009, after growth of 3.9% in 2008. As such, we should expect Silver’s industrial demand growth
to slow from the 7% seen in 2007. That said, industrial applications now account for 54% of fabrication
demand, which is up from 38% ten years ago, and with India, China and the US accounting for 70% of
this rise in industrial usage, via a wide spread of new applications, demand may be well cushioned.

Fabrication demand

Fabrication demand covers Silver’s use in industry, photography and jewellery manufacturing. So far in
2008, all these sectors have been hit hard. The high prices in H1’08 that saw an average price of
$17.42/oz, after an average 2007 price of $13.38/oz, deterred jewellery demand. Photographic demand is
in steady decline with demand falling around 10% per year as digital photography has taken market share
much faster than originally thought. Industrial output has been the mainstay of Silver demand growth,
growing 7% in 2007. Although many applications are price inelastic, when prices were high consumers
lived hand to mouth and since the summer’s rapid decline, there seems little pressure on them to restock.
Indeed, there was some inventory destocking as the Economic outlook deteriorated. Fabrication demand is
expected to pull back by around 8% in 2008 and with hard economic times ahead in 2009, demand is
likely to suffer again, although lessening industrial destocking should help boost apparent demand and
offset ongoing declines from photography. Overall, we expect fabrication demand to be broadly flat in
2009 at 24,500 tonnes. Below we can see comparisons between Annualized gain on silver & gold:-

Batteries

Both rechargeable and disposable batteries are using Silver today. Silver provides superior power to
weight characteristics. By weight Silver makes up 35% of most of these usually small batteries. The Silver
produces both higher voltages and a longer life in these types of batteries. Watches, cameras, small
electronic devices, power tools, and portable TV cameras are some Product which use silver in their
batteries.

Coins

In 2006 39.8 million ounces were produced as Silver coins. Silver has been used as money as far back as
550 B.C. and continues to be sued to this day in some countries including Mexico. Since Silver was more
plentiful and of less value than Gold it served as a practical means of exchange. Today most of the Silver
produced is consumed in one form or another with only 64 million ounces per year set aside for
investment purposes. With such a small amount of produced Silver actually making it to market the price
of Silver will see some spectacular gains when even a relatively small amount of Silver is sought for
investment.

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 Wealth Creator : Focus on Silver
Bearings

Bearings electroplated with Silver provide greater strength and load carrying capacity. Military and heavy
duty applications where a no fail system is needed use these bearings. Every time you step on a plane you
are holding your life in Silvers hands. Silver coats the bearings in jet engines and provides the lubricity to
avoid a catastrophic failure in the event of a lubrication failure.

Brazing and Soldering:

Silver is replacing lead in solders to provide a leak proof and corrosion resistance joint. Air-conditioning,
refrigeration, power distribution electrical engineering, automobile and the aerospace industry use silver
brazing and soldering. In plumbing the bactericidal properties of Silver is being touted more every day as
a safer way to install plumbing in residential and commercial buildings. In 2006, 47.7 million ounces Of
silver were used for brazing and soldering.

Catalysts

Roughly 700 tonnes of Silver are in continuous use throughout the world’s chemical industry. Silver is
essential to producing the two compounds the plastics industry needs to produce flexible plastics and hard
plastic; ethylene and formaldehyde. Imagine a world without plastics.

Without Silver this US $300 billion industry would not exist!

Silver is the only catalyst that will oxidize ethylene gas into ethylene oxide and worldwide production
exceeds 14 million tonnes a year. Being the building block of polyester textiles used in clothing computers,
electronics, domestic appliances and Mylar tape (recording tape). Also, 25% of ethylene oxide production
goes to produce Antifreeze for our cars.

Electrical

Silver is the best electrical conductor of any known material and it does not corrode. Silver is used in
conductors, switches, contacts and fuses. Silver is used in virtually all electrical appliances. Just the US
market for electrical switches is roughly 2.7 Billion per year.

Photography

Although the digital age is reducing the amount of silver that is used in photographic purposes it will
always remain a part of the demand structure because of its low costs and superior definition qualities. In
2006 approximately 145.8 million ounces of
Silver were used in photography. Silver is also used in x-rays. From humans, animals, steam valves,
ships, aircraft or truck axels Silver x-rays remain the surest way to
Find faults in a structure.

Medical application

While only in the last 200 years has Silver been documented as a bactericide Silver has been used
throughout the ages in purification applications Silver vessels were used to keep water, wine milk and
vinegar fresh and pure during long voyages. Babies fed with a Silver spoon when young were even proven
to have better health

Than other. Silver sulfadiazine is used by hospital for burn victims to prevent bacterial infections. Also
surgical gowns and other hospital apparel is incorporating a layer of fabric infused with silver particles to
prevent microbial transmissions. Research continues to discover new uses For the biocidal properties of
silver.
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 Wealth Creator : Focus on Silver
Jewellery and silverware

Silver is the most reflective metal and enjoys a prominent role in jewellery manufacturing worldwide.
Although most Silver needs to be strengthened for use in cutlery bowls and other decorative items then
called Sterling Silver (92.5% Silver, 7.5% Copper). The demand for Silver in jewellery yearly is 165.8
million ounces and 59.1 million ounces for silverware representing a formidable component of total
demand.

Mirrors and coating

Being virtually 100% reflective after polishing Silver is at the forefront of high end mirrors and coatings on
glass. When coated on glass Silver will both reflect the suns heat in summer and maintain the heat inside
in winter providing substantial cost savings to the user. When used on prescription glasses Silver can
reduce UV rays by
At least 97%

Solar Energy

Silver paste is used in 90% of all crystalline silicon photovoltaic cells which are the most common solar
cell. As the use of solar power increases so will the use of Silver. Many buildings now are built with a
Silver membrane which acts as a solar cell creating energy and heating or cooling much reducing the
utility costs. As this technology is proven over time more and more companies and families will insist on
using this type of technology.

Water purification:-

Perhaps the most important use of Silver is that of water purification. Silver works as a bactericide and
algaecide. Silver is being used in hospitals homes and remote communities throughout the world in need
of clean water. Possibly the most pressing issue of today is clean water and the use of Silver in purifying
water may be the solution. Over half of the water purification systems sold in the U.S. every year employs
Silver. Silver purifies water of bacteria, chlorine, trihalomethanes, lead, particulates and odour. Silver
prevents the build-up of algae and bacteria in the filters. New research shows Silver and oxygen catalyze
to produce a powerful sanitizer virtually eliminating the need for the use of chlorine.

It comes down to simple supply and demand fundamentals. The long bear market for Gold and Silver has
led to a lack of investment in discovering new silver mines worldwide and now that investment and
industrial uses for Silver is skyrocketing the price has no choice but to Go up

In 2006 the supply and demand of silver matched at 911.8 million ounces. As demand increases for both
investment and industrial application this figure will become skewed, needing more supply to meet the
demand needs. The only remedy for this will be higher price.

DISCLAIMER

This document has been prepared by the Research Division of Focus Shares & Securities Pvt. Ltd. Mumbai, and meant for use by the recipient
only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission
of Focus Shares & Securities Pvt. Ltd. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The
information contained in this report has been obtained from sources that are considered to be reliable. However, Focus Shares & Securities Pvt.
Ltd. has not independently verified the accuracy or completeness of the same. Neither Focus Shares & Securities Pvt. Ltd. nor any of its affiliates,
its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available
or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to
future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the
recipient's particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor.

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